Responsible AI Use Among RIBO Licensees

Amid rapid advancements in Artificial Intelligence (AI), it is unsurprising that there is interest in leveraging it in the Property and Casualty (P&C) insurance industry.

The Registered Insurance Brokers of Ontario (RIBO) has explored and will continue to examine the applicability of existing regulatory requirements, guidance, and our mandate on AI use by insurance brokers.

While AI adoption can introduce industry benefits, there are many risks to consumer protection and professional standards that could arise.

RIBO licensees should be familiar with the requirements outlined in the Code of Conduct Handbook. For instance, brokers must:

• Be competent
• Act with integrity and in their clients’ best interests
• Disclose any conflicts of interest
• Protect privacy and consumer data
• Maintain client confidentiality.

Remember

• These obligations do not change when using AI technology and tools.
• Any use of AI must be in compliance with the Code of Conduct and expectations set in the Fair Treatment of Customers document available on our website.
• AI does not replace an individual’s professional judgement or conduct.

Developing an AI governance policy prior to introducing certain AI-based tools within your processes can act as a foundation for ongoing innovation within your business. Follow the below RIBO recommendations when developing an AI governance policy.

Competency Related to Third-Party Tools and Accountability for Customer Outcomes

While it is not necessary for brokers to understand the technical aspects of AI technology, they do need to be trained to understand and be able to identify when AI is being used, and the risks of using AI within their business.

It is a RIBO licensee’s professional responsibility to comply with the Code of Conduct even if they use third-party vendors or vendor tools to support or augment broker services that would otherwise be performed by a human.

Firms should create governance structures that monitor risks and provide ongoing due diligence and education and training related to any AI based tools and processes that are being used.

Act in the Client’s Interest by Proposing Suitable Policies

Firms should ensure that anything generated or altered by an AI tool is overseen by a licensed member before being presented to a client.

For example, if AI is being used for underwriting, firms should be auditing and monitoring generated outputs to ensure that the model is performing as intended and is not subject to systemic biases.

Human in the Loop and Transparent Use

A customer should know when they are engaging with AI instead of a human. Firms should be transparent to the public about their use of customer-facing generative AI tools, such as chatbots or online quoters.

The use of generative AI by brokerages should be closely monitored by one or more licensed brokers to always keep a ‘human in the loop.’ This allows licensed members to respond to coverage questions and take corrective action(s) in the event of any incorrect or misleading results.

Protecting Privacy, Consumer Data, and Maintaining Confidentiality

All reasonable efforts should be made to ensure that clients’ personal information is protected when using AI. Firms can do this through developing policies for:

• Vendor Selection: Vet all current and future vendors to ensure that any customer data processed through an AI tool does not leave control of the firm, and that it is not stored by the third-party vendor or used for training purposes.
• AI Risk Awareness and Prevention: Put in place clear policies concerning authorized and unauthorized AI tool use within your AI governance policies to prevent unintentional privacy breaches from occurring. Individual licensees should avoid processing any client information through an open AI system.

Further Reading

• RIBO Explores AI Innovation in Ontario’s Insurance Industry
• Research Scan on AI in Property & Casualty Insurance: Final Report
• RIBO Guidance: Fair Treatment of Customers RIBO-001
• Broker Management Systems and Third-Party Aggregators
• Read more from the Office of the Privacy Commissioner of Canada on what you can do to prioritize privacy and consumer protection when implementing new AI-based technologies.
• Check out the Chambre de l’assurance de dommages (ChAD) best practices document for insurance professionals.